The Liberal Democratic Party, set to form a new government, decided Thursday to put together a pump-priming package by Jan. 11 to keep the lethargic economy afloat, party lawmakers said Thursday.
Based on the package, the new government, to be led by LDP leader Shinzo Abe after the party’s landslide victory in Sunday’s Lower House election, will decide on a supplementary budget on Jan. 15 for its submission to the Diet in January, they said.
“We’ll work out the budget by giving up yearend and New Year’s holidays,” LDP Policy Research Council Chairman Akira Amari told reporters after a meeting of party executives where the decision was made.
While the meeting fell short of specifying the size of the supplementary budget for fiscal 2012, which ends next March, he said, “It will be sufficient enough to pull Japan out of deflation.”
Although the LDP plans to have the fiscal 2013 budget submitted to the Diet by the end of February, the submission could be delayed until late March with priority given to the supplementary budget, Amari said.
Abe, set to become prime minister Wednesday, has vowed to give priority to combating Japan’s chronic deflation and taking measures to spur the economy.
Abe is also eyeing large-scale additional economic measures next fall to create an environment to carry out the party’s promise to raise the consumption tax to 8 percent from the current 5 percent in April 2014, DPJ lawmakers said.
The legislation for the sales tax hike, enacted in August, stipulates as a nonbinding target for the hike that the government seek to achieve nominal economic growth of around 3 percent and real growth of about 2 percent.
Tax fairness urged
The incoming government led by Liberal Democratic Party head Shinzo Abe should introduce measures to make the corporate tax burden fairer to help reduce budget deficits, a businessman close to Abe said Thursday.
Specifically, pro forma standard taxation, which imposes taxes even on loss-making firms on the basis of objective standards such as sales, should be utilized, said Shigetaka Komori, chairman of Fujifilm Holdings Corp.
His remark could spark debate, as such a measure could lead to ab higher tax burden for small and midsize businesses.
Calling Abe “a savior of faltering Japan,” Komori said he is willing to support him.